Forex Market: GBP/JPY daily forecast

During yesterday’s trading session GBP/JPY traded within the range of 171.62-172.31 and closed at 172.15.

At 7:03 GMT GBP/JPY traded at 171.84, losing 0.18% for the day. The pair touched a daily low at 171.94 at 1:20 GMT.

Fundamental view

The deficit on United Kingdom’s trade balance probably widened to 8.650 billion GBP in April from a deficit figure of 8.478 billion GBP during the preceding month. This indicator is also known as visible trade balance, because it reflects the difference in value between exported and imported physical goods, without the inclusion of exported and imported services. Since UK economy is to a great extent dependent on trade, the visible trade balance is considered as a key factor, providing clues over the resilience of nation’s economic growth. In case UK trade deficit shrank more than anticipated, this would provide support to the pound. The Office for National Statistics (ONS) will publish the official figure at 8:30 GMT.

At the same time, the deficit on United Kingdom’s trade balance with countries outside the European Union probably narrowed to 3.150 billion GBP in April from a deficit of 3.190 billion GBP in the preceding month. A higher than expected deficit would have a bearish effect on nation’s currency.

Technical view

According to Binary Tribune’s daily analysis, in case GBP/JPY manages to breach the first resistance level at 172.43, it will probably continue up to test 172.72. In case the second key resistance is broken, the pair will probably attempt to advance to 173.12.

If GBP/JPY manages to breach the first key support at 171.74, it will probably continue to slide and test 171.34. With this second key support broken, the movement to the downside will probably continue to 171.05.